Employee Turnover: Causes, Impact and Retention Strategies - Essay Sample

Introduction

In recent decades, the issue of employee turnover in organizations has received a lot of attention from practitioners and academicians. The concept refers to the number of staff workers who leave a company and are replaced by new ones. Most of the past studies have focused on establishing the causes of employee turnover, and have established its impact is disastrous to the organization (Kumar & Mathimaran 2017). Therefore, the attraction and retention of new employees is increasingly becoming challenging in many organizations. On one hand, there is the issue of diversity of job roles required, while on the other hand, there is a spectrum of new methods of job attractions available (Mohr 2017). As such, the recruitment of new staff members is becoming more personalized, strategic, and targeted than ever for firms (Kumar & Mathimaran 2017). Hence, the overarching challenge that most firms are facing is finding and attracting new employees that will remain in the organization for long and contribute towards achieving success in the market.

A variety of systems by the HRM have been adopted to attract and retain the most competent employees. The aspect can be viewed through the lens of generations, the older generation was mostly motivated by prospects of pay increase and promise of pension after retiring (Yu, Liu & Ren 2019). Undeniably, most of the staff workers that fall under the category of 'Silent Generation' have all quit working, and the 'baby boomers' are nearing the retirement age (Cohen, Blake, and Goodman 2016). Thus, the contemporary job market trend, which is the future of the workforce is composed of Generation Z who are in the cohort of individuals born in the year 1995-2010. Consequently, this prompts the need for analyzing the needs, expectations, and interests of this workforce, for organizations to be well prepared to meet these needs and expectations, and hence, attract and retain the most competent candidates. It is in this light that the study seeks to examine the impacts of a high turnover rate on Generation Z to the organization.

Background Information

Case Study

Roger Capital is part of Rogers Group Inc., which prides itself on having a well-connected business network across the world. It was founded in 2016 after the merging of its three major sectors, financial, technological, and corporate (Rogers Capital 2019). As such, the company provides financial, technological, corporate products and services. The corporate service sector was formed in 1990. Since then, the industry has acquired many management companies, including Kross Boarder Service Ltd, Consilex Ltd, River Court Services Ltd, Globefin Ltd (Rogers Capital 2019). The corporate service of Rogers Capital serves local and international clients and is approved by the Financial Services Commission (FSC). Rogers Capital Financial Services sector was created in 1992 (Rogers Capital, 2019). The sector is founded on two pillars; consumer financial services and specialist advisory services. Since its inception, the division has offered investment management services to a diverse set of individual and institutional clients. (Rogers Capital 2019) Recently, it added on its portfolio the consumer credit, leasing, and hire purchase service. On the other hand, the technological service sector was formed in 2001, with the aim of offering extensive expertise in business and information technological solutions (Rogers Capital 2019).

The company is based in Port Louis, Mauritius, United States. Rogers Capital's vision is to keep evolving and be the leading financial, technological, and corporate service provider. To achieve this, the company has always sought to hire the most talented workforce. However, in the past year, Rogers Capital has seen an increase in its employees' turnover rate. After conducting a thorough analysis, it was found out that the turnover rate is higher among employees aged between 20-25 years. Notably, this group falls under the category of generation Z workforce.

Generation Z's workforce is very different from the succeeding and preceding generations. In particular, this demographic cohort comprises of individuals born between 1995 and 2010 (Dimock, 2019). Generation Z varies to the cohort group above it, which is the millennial consisting of individuals born 1981-1994 (Dimock, 2019). Although many different factors influence how the two groups were brought up, it is notable that both groups grew during the internet technological era. Thus, Generation Z studied at a period when most companies were adopting the use of internet technology in their operations (Dimock, 2019). One thing that is special with this workforce generation is that they witness financial operations impact their preceding workforce. For instance, they witnessed the millennials struggle with high university debts as well as hard economic times, especially after the 2008 economic recession (Dimock, 2019). According to Goessling (2017), generation Z perceive work in a different way and it highly values being recognized for their contribution. Thus, the company ought to reconsider its policies and practices for employee retention developed for previous generations to ensure the new approach is applicable with generation Z employees. It is on the note that this study seeks to investigate the impacts of and reasons for high turnover rate on Generation Z at Rogers Capital.

Problem Statement

Given the mounting termination and resignation incidences by Generation Z at Rogers Capital firm in the past year, the need for increased human capital management is apparent. With much of the focus being given on ensuring that the company provides unparalleled financial, technological, and corporate services, the human resource department is thus charged with the responsibility of ensuring retention of skills while at the same time reducing turnover of talents within the organization. Markedly, Generation Z's workforce is the most technologically advanced generation of workers, and thus, their contribution to the success of the company is indispensable. Therefore, this study is expected to contribute towards identifying the practical impacts as well as solutions to the high turnover rate by Generation Z at Rogers Capital.

Significance of the Study

The findings of this study will be of considerable importance to the Rogers Capital firm. It will edify them on the major causes, impacts, as well as solutions to their current problem of high turnover rate by the Generation Z workforce. If the solutions will effectively be espoused, they will be in a position to increase the retention rate of this group of workers.

Also, the findings of this study will also be of considerable significance to various scholars in the field of human resource management. The study will be published and will be available in hardcopy in the school library as well as a softcopy on the internet. The documented research will add more insights to researchers on the impact of high turnover rate by Generation Z at the workplace. Further, the study will, in myriads of ways, contribute to the existing literature on the impact of high turnover rate on Z generation, which will be part of educational resources that researchers will find useful to further their study.

Objectives of the Study

Broad Objective

To establish the impact of the high turnover rate among Z generation on an organization

Specific Objectives

• To investigate the potential impacts of staff turnover on the organization performance
• To establish reasons for Generation Z employees leaving an organization
• To identify and analyze factors that may encourage a high retention rate of Generation Z in an organization.

Scope of the Study

The study was confined to Rogers Capital offices based in Port Louis, Mauritius, United States, to enable the management to disclose much information about the turnover rate of Generation Z workforce.

Limitation of the StudyThe study focused on Rogers Capital firm. Under normal circumstances, the research would have been involved in many companies, both public and private. Also, the researcher appreciates the fact that the organization's performance is a result of a combination of many factors. However, this particular study was restricted to the impact of high turnover among Generation Z at the organization.

Literature Review

This chapter reviews existing literature that relate to the topic of study. The section covers; definition of significant concepts (turnover, retention, Generation Z, and organization performance), impacts of staff turnover on the organization performance, reasons for Generation Z employees leaving an organization, factors that encourage high retention rate of Generation Z in an organization, critique of existing literature, theoretical framework, and conceptual framework, problem areas and research gaps, and finally, the summary of the chapter

Definition of TermsEmployee TurnoverEmployee turnover is one of the most studied topics in organizational behaviour literature. However, the concept remains highly dynamic, mainly due to changing workplace environment. To better understand the impacts of turnover in an organization, one must have a clear understanding of its meaning. Scholars have fronted different definitions;

According to Nel et al. (2001), employee turnover refers to "rotation of workforce around the labour markets, between organizations and occupations, and between unemployment and employment. "Markedly, this definition is chiefly based on the labour market. However, the definition is not sufficient since it does not indicate how the turnover rate can be quantified.

According to the Cambridge dictionary, employee turnover refers to "the rate at which workers leave a company and are replaced by new ones."

Some authors have included the idea of employees leaving organizations involuntary in their definition of workforce turnover from the organizational point of view. For instance, CIPD (2014) defines it as "the ratio of employees who have left during a given period divided by the average number of staff workers during that period." Although this definition offers a proper technique of quantifying turnover, it does not include the concept of turnover as a process as well as the factors that cause it. Woods (1995) also includes the idea of staff leaving a firm voluntary or involuntary. The scholar observes that "each time a job position is vacated, either involuntary or voluntary, a new staff member must be recruited, this replacement cycle is called employee turnover."

The aspect of the contributing factors to increased employee turnover, either voluntary or involuntary, has been included in some definitions. For example, Hom and Griffeth (1995) propose a model, which is based on the decision-based model. The scholars note that employee turnover is a process rather than a single action within the business realm. Further, they argue that the concept of turnover is a complex process that is dynamic based on the worker's perception with respect to the organization's position at any point in time. Thus, this insight allows academicians to include the concept of reasons behind turnover in the definition.

Turnover Intention

The decision by an employee to quit an organization will have undesirable outcomes for both the company and the worker. Therefore, identifying and understand predictors that lead to turnover intention will be significant in minimizing the negative impact on the overall performance of the organization (Goessling 2017). According to Goessling (2017), the most contributing factors that impact employees to leave include the worker's attitudes and potential, peers at the workplace, the configuration of management and the o...